Solar Power Battle Puts Hawaii at Forefront of Worldwide Changes

HONOLULU — Allan Akamine has looked all around the winding, palm tree-lined cul-de-sacs of his suburban neighborhood in Mililani here on Oahu and, with an equal mix of frustration and bemusement, seen roof after roof bearing solar panels.

Mr. Akamine, 61, a manager for a cable company, has wanted nothing more than to lower his $600 to $700 monthly electric bill with a solar system of his own. But for 18 months or so, the state’s biggest utility barred him and thousands of other customers from getting one, citing concerns that power generated by rooftop systems was overwhelming its ability to handle it.

Only under strict orders from state energy officials did the utility, the Hawaiian Electric Company, recently rush to approve the lengthy backlog of solar applications, including Mr. Akamine’s.

It is the latest chapter in a closely watched battle that has put this state at the forefront of a global upheaval in the power business. Rooftop systems now sit atop roughly 12 percent of Hawaii’s homes, according to the federal Energy Information Administration, by far the highest proportion in the nation.

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Household panels for solar power and hot water in Kapolei, Hawaii. Installing new electrical panels was blocked there until recently.Credit Kent Nishimura for The New York Times

“Hawaii is a postcard from the future,” said Adam Browning, executive director of Vote Solar, a policy and advocacy group based in California.

Other states and countries, including California, Arizona, Japan and Germany, are struggling to adapt to the growing popularity of making electricity at home, which puts new pressures on old infrastructure like circuits and power lines and cuts into electric company revenue.

As a result, many utilities are trying desperately to stem the rise of solar, either by reducing incentives, adding steep fees or effectively pushing home solar companies out of the market. In response, those solar companies are fighting back through regulators, lawmakers and the courts.

The shift in the electric business is no less profound than those that upended the telecommunications and cable industries in recent decades. It is already remaking the relationship between power companies and the public while raising questions about how to pay for maintaining and operating the nation’s grid.

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The issue is not merely academic, electrical engineers say.

In solar-rich areas of California and Arizona, as well as in Hawaii, all that solar-generated electricity flowing out of houses and into a power grid designed to carry it in the other direction has caused unanticipated voltage fluctuations that can overload circuits, burn lines and lead to brownouts or blackouts.

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Load dispatchers monitor the electrical grid at the Hawaiian Electric Company’s operations center in Honolulu. The utility says power from household solar panels can destabilize the system.Credit Kent Nishimura for The New York Times

“Hawaii’s case is not isolated,” said Massoud Amin, a professor of electrical and computer engineering at the University of Minnesota and chairman of the smart grid program at the Institute of Electrical and Electronics Engineers, a technical association. “When we push year-on-year 30 to 40 percent growth in this market, with the number of installations doubling, quickly — every two years or so — there’s going to be problems.”

The economic threat also has electric companies on edge. Over all, demand for electricity is softening while home solar is rapidly spreading across the country. There are now about 600,000 installed systems, and the number is expected to reach 3.3 million by 2020, according to the Solar Energy Industries Association.

The Edison Electric Institute, the main utility trade group, has been warning its members of the economic perils of high levels of rooftop solar since at least 2012, and the companies are responding. In February, the Salt River Project, a large utility in Arizona, approved charges that could add about $50 to a typical monthly bill for new solar customers, while last year in Wisconsin, where rooftop solar is still relatively rare, regulators approved fees that would add $182 a year for the average solar customer.

In Hawaii, the current battle began in 2013, when Hawaiian Electric started barring installations of residential solar systems in certain areas. It was an abrupt move — a panicked one, critics say — made after the utility became alarmed by the technical and financial challenges of all those homes suddenly making their own electricity.

The utility wants to cut roughly in half the amount it pays customers for solar electricity they send back to the grid. But after a study showed that with some upgrades the system could handle much more solar than the company had assumed, the state’s public utilities commission ordered the utility to begin installations or prove why it could not.

It was but one sign of the agency’s growing impatience with what it considers the utility’s failure to adapt its business model to the changing market.

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A technician adjusts a power meter in Honolulu.Credit Kent Nishimura for The New York Times

Hawaiian Electric is scrambling to accede to that demand, approving thousands of applications in recent weeks. But it is under pressure on other fronts as well. NextEra Energy, based in Florida, is awaiting approval to buy it, while other islands it serves are exploring defecting to form their own cooperative power companies.

It is also upgrading its circuits and meters to better regulate the flow of electricity. Rooftop solar makes far more power than any other single source, said Colton Ching, vice president for energy delivery at Hawaiian Electric, but the utility can neither control nor predict the output.

“At every different moment, we have to make sure that the amount of power we generate is equal to the amount of energy being used, and if we don’t keep that balance things go unstable,” he said, pointing to the illuminated graphs and diagrams tracking energy production from wind and solar farms, as well as coal-fueled generators in the utility’s main control room. But the rooftop systems are “essentially invisible to us,” he said, “because they sit behind a customer’s meter and we don’t have a means to directly measure them.”

For customers, such explanations offer little comfort as they continue to pay among the highest electric rates in the country and still face an uncertain solar future.

“I went through all this trouble to get my electric bill down, and I am still waiting,” said Joyce Villegas, 88, who signed her contract for a system in August 2013 but was only recently approved and is waiting for the installation to be completed.

Mr. Akamine expressed resignation over the roughly $12,000 he could have saved, but wondered about the delay. “Why did it take forceful urging from the local public utility commission to open up more permits?” he asked.

Installers — who saw their fast-growing businesses slow to a trickle — are also frustrated with the pace. For those who can afford it, said James Whitcomb, chief executive of Haleakala Solar, which he started in 1977, the answer may lie in a more radical solution: Avoid the utility and its grid altogether.

Customers are increasingly asking about the batteries that he often puts in along with the solar panels, allowing them to store the power they generate during the day for use at night. It is more expensive, but it breaks consumer reliance on the utility’s network of power lines.

“I’ve actually taken people right off the grid,” he said, including a couple who got tired of waiting for Hawaiian Electric to approve their solar system and expressed no interest in returning to utility service. “The lumbering big utilities that are so used to taking three months to study this and then six months to do that — what they don’t understand is that things are moving at the speed of business. Like with digital photography — this is inevitable.”